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ECB stimulus has created 80,000 French jobs: Bank of France chief

Monday, March 21, 2016 - 20:51

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France's central bank chief Francois Villeroy de Galhau said Monday that contested economy-boosting measures by the European Cental Bank had produced "tangible results", including tens of thousands of French jobs.

[PARIS] France's central bank chief Francois Villeroy de Galhau said Monday that contested economy-boosting measures by the European Cental Bank had produced "tangible results", including tens of thousands of French jobs.

The central banker defended the volley of growth stimulus and anti-deflationary steps launched by the Frankfurt-based ECB and under fire in Germany, as helping to "finance the real economy".

He told a news conference on French inflation that ECB action such as buying up massive quantities of bonds via its quantitative easing (QE) programme underway since 2014 had "allowed a substantial easing of borrowing conditions for eurozone companies".

Such measures also helped "stimulate loans to the real economy", he said.

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Their impact in France was a 0.3-percentage point boost to its gross domestic product of 1.1 per cent in 2015. "That represents the creation of around 80,000 jobs for the economy," Villeroy de Galhau told reporters.

The ECB surprised financial markets after cutting its main interest rate to zero percent for the first time on March 10 and ramping up a huge stimulus programme amid doggedly low inflation and subdued growth.

Germany's Bundesbank chief Jens Weidmann Saturday criticised the latest package saying it did "not convince me overall".

"Negative interest rates are only one element of a wider package," Villeroy de Galhau said.

"Monetary policy plays an important role in thwarting weak inflation and supporting economic activity," he said, warning it was "more risky for central banks to act too late than too early".

AFP

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